Having a user interface that maintains a consistent size is a good thing. Stating that it looks ridiculous at any time that the full area is not used is just an opinion (and not even particularly accurate according to most general software usability studies I've seen). The issue is not that the dialog area of the screen has room for 4 lines regardless of how many lines are actually displayed. The true issue is that the general ren'py design uses the full screen for images and then covers that up with the text. In a number of scenarios that issue is mostly moot as the image is often just kind of a background and one doesn't need to see the part of the image obscured by the text. For instance many of the original VNs focused much of their time on the pop-up speakers (and this overlay characters with their emotes did not extend behind the dialog area, nor were they part of the background).
A lot of the adult games made currently are much more focused on only the full screen image. And quite frequently in these games, the most interesting bits of the images themselves become completely obscured by the dialog box. (Yes, one can hide the box, but that is not a very good user interface. The user should not need to constantly, manually turn a setting on and off to see the primary content.) It would be much better if developers would actually change the layout so that image and text showed up in separate portions of the screen such that both could be viewed in their entirety at the same time. Rather than have a toggle to turn on/off the text, have a toggle that pops up a larger view of the image (this would enable the same view as what a player can get now for a really good image, but would never be necessary like the current hide is). Either that, or... developers know exactly where the text dialog is going to be... tailor the images such that the portions of primary importance do not fall behind the text wall.
Sure, the text area could be made smaller easy enough, but portions of the image will still be hidden. It in no way addresses the actual issue. Plus it is hard to know how much text per display one will actually need in this, 100+ release cycle that current devs use. If one had a finished game, sure, then they could figure out how big or small they could make the box to fit all their needs. That just is not the case currently.